Lynne Brum – Vice President-Planning and Corporate Communications Oli Peoples – President and Chief Executive Officer Kristi Snell – Vice President-Research and Chief Science Officer

Jay Albany – SeeThruEquity

Welcome to the Third Quarter Financial Results and Business Update Conference call for Yield10 Bioscience. During the call, participants will be in a listen-only mode. The presenters will address questions from an analyst as well as questions submitted by shareholders as part of our call today. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference call over to your host, Yield10 Vice President of Planning and Corporate Communications, Lynne Brum.

Thank you, Doug, and good afternoon, everyone. Welcome to Yield10 Bioscience Third Quarter 2017 Conference Call. Joining me on the call today are President and CEO, Dr. Oli Peoples; Vice President of Research and Chief Science Officer, Dr. Kristi Snell; and Chief Accounting Officer, Chuck Haaser. Earlier this afternoon, we issued our third quarter 2017 news release. This release as well as slides to accompany our presentation today are available on the Investor Relations section of our website at yield10bio.com. Let's turn to Slide 2. Please note that as part of our discussion today, management will be making forward-looking statements. These statements are not guarantees of future performance and therefore, you should not place undue reliance on them. Investors are also cautioned that statements that are not strictly historical constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated. Those risks include risks and uncertainties detailed in Yield10's filings with the SEC, including the company's most recent 10-K and 10-Q. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. I'll now turn the call over to Oli.

Thanks, Lynne, and hello, everyone, and thanks for joining our call today. Please turn to Slide 3, and let's cover a few financial highlights starting with the balance sheet. In July, we raised $2 million in net proceeds in an offering of common stock and warrants. We ended third quarter 2017 with $3 million of cash. We expect the cash in hand, together with revenue expected under current government grants, will support our operations into first quarter of 2018. Net operating cash usage for the first nine months of 2017 was $6.3 million. We estimate net cash usage for the full year 2017 will be approximately $8 million to $8.5 million, including anticipated payments for restructuring costs due this year. We will continue to identify ways to access capital through the financial markets, generate revenue through grants and collaborations and manager expenses. On November 2, we filed an S1, signaling our intent to raise capital required to strengthen our balance sheet. In 2018, our plan is to continue development of C3003 as a novel yield trait crop in feed crops and to advance our portfolio of additional valuable traits accessible through genome editing. On our P&L, let's review the financial results that are reported as continuing operations. This captures our crop science-related activities as well as administrative and infrastructure support for the Yield10 business. We reported a net loss from continuing operations of $2 million, or $0.59 per share, for the third quarter of 2017. We reported $200,000 in grant revenue, $1.1 million in R&D expenses and $1.1 million in G&A expenses in the third quarter. The per share result reflects the 1-for-10 reverse stock split that was effective in May. Our continuing operations results include certain restructuring costs which will be paid through May 2018. For more details on our financial results, please refer to the earnings release. Now let's turn to Slide 4, recent accomplishments. We made solid progress in third quarter. Yield10 was named the sub-awardee on a 5-year $10 million DOE grant for research to identify new strategies for boosting oilseed yield in Camelina. Michigan State University is leading the grant, and Yield10 is the industry partner. We expect to receive $3 million in funding over the period of the grant to support the associated research activities. The research program will focus on integrating our two discovery platforms to identify new genes and gene combinations to improve yield in Camelina. We expect this to have application to other important crops, and we will continue to pursue opportunities to fund our research activities with non-diluted funding when available to us. We also announced that USDA-APHIS confirmed nonregulated status for our genome-edited C3008a Camelina line. This represented our first submission for a nonregulated trait, and with the response received from USDA-APHIS, we have now validated our in-house capability in this area. We believe there are significant opportunities for genome editing in crops. We are currently working on a multi gene-edited oilseed line based on traits C3008a, b and C3009 as an upcoming submission. In addition, C3007 and C3010 may also be accessible through genome editing, and we are targeting – targeted at increasing oil content in oilseed crops. The CRISPR genome editing tool is of high interest in the ag space, and a few weeks ago, DuPont Pioneer and the Broad Institute made an announcement indicating they are joining forces to make nonexclusive licenses to their foundational CRISPR/Cas9 IP available widely to the ag center – sector. We'll have to see how this develops, but view it as a good sign for innovators like Yield10. We added an additional patent application in our technology, bringing the total filed this year to 5, and we are completing our field tests of C3003 in Camelina and canola, and expect to announce the results of the studies later in fourth quarter. Let's now turn to Slide 5. First, I'd like to recap our vision for any new listeners. Yield10 is developing gene trait technologies for food and feed crops to produce higher yields with lower inputs of land, water and fertilizer. Yield10 is addressing a compelling market opportunity and is aligned with compelling global megatrends. These are global food security, where estimates of global population growth will put pressure on resources and drive increased demand for food, including increased protein consumption as the standard of living rises worldwide. In developed nations, Yield10 is aligned with a focus on health and wellness and the demand for foods within an improved nutritional profile. The company is aligned with food safety and sustainability, as there is a growing interest in the seed to plate value chain, and with innovation in agriculture driven by new technology approaches such as Big Data, metabolic modeling and genome editing. In our call today, we will highlight the focus and ways we are advancing our business to fulfill our mission and bring our agricultural innovations forward in development to capture significant opportunities in the marketplace. Let's now turn to Slide 6. The yield challenge. Yield10's goal of achieving step-change increases in major grown crops is very challenging, so it's useful to provide some contents around this goal based upon the industry experience over the last 20 years and from history. The ag biotech majors have made massive investments over the last 20 years, screening thousands of individual plant genes to improve crop performance, largely unsuccessfully. This is in part due to the reality that the knowledge of plant genome didn't exist 20 years ago and was being developed in parallel. At the same time, the major success of early ag biotechnology was based on using microbial genes to impart new functionality of infrastructure to crops, to develop crops that were herbicide-tolerant, pest-resistant and, more recently, drug-tolerant. The major differences between modern corn and its ancient ancestor, teosinte, are well documented, and the five or six key transcription factor genes responsible for these – for those major changes have also been identified. For the most part, the activity of these genes was reduced to turned down, essentially reducing key control points. Based on this background, the key question is how do we identify the next series of key genes to pick a crop like corn to the next level of yield? Let's now turn to Slide 7, technology platform. To better understand the challenge, consider the corn genome, which is predicted to have around 39,000 functional genes. Of these, around 2,400 are transcription factors or plant gene regulators. Testing all two gene combinations of transcription factors in corn would require over 3.3 million individual experiments. There's therefore a need to create advanced computational tools for predicting the right combinations of plant genes which could be targeted for editing to improve crop performance. We find it useful to compare the flow of carbon through a plant to the flow of traffic in a major city. Changing a single traffic light in the city will not increase the flow of traffic into the city and direct it to a specific location. We believe that plants which capture and utilize carbon more efficiently will enable more robust crops capable of increased seed yield. So we need to enable the crop to fix more carbon and be able to direct the condition of fixed carbon to seed production. There are two key components in plants. Metabolic pathways in gene regulators such as transcription factors, which coincidentally are the focus of our two independent discovery platforms. Using a road map analogy, metabolic pathways constitute the carbon conversion infrastructure and transcription factors constitute the genetic traffic lights that direct changes in plant metabolism in responses to environmental or developmental conditions. Our smart carbon grid for crops platform, our metabolic engineering platform, has already proven useful in identifying a number of our C3000 series of traits, including C3003, which is an algal gene that adds new metabolic functionality to crops. Using our T3 Platform, we've identified the C4000 series of transcription factor gene traits. Analysis of high yield plants developed in the T3 Platform program also provided new data on changes in metabolic activities in the engineered high photosynthesizing switchgrass crops. We're currently repeating that work with C4001 and C4003 in rice and wheat and plan to do so in corn, even as we integrate the two platforms. In a crop like modern hybrid corn, which already produces vastly more seed than it needs to reproduce, our initial objective will be to reduce or even eliminate the activity of the transcription factors that signal the plant it has already produced enough seed. Accordingly, our approach is to turn down the sequence of transcription factors, a red light, which signal the plant to stop sending carbon to the seed. The challenge is to identify the combinations of these transcription factors that can be done, regulated by editing to accomplish that goal. Here we have already made significant progress with the C4004 trait alone, and in combinations with the additional 23 transcription factor gene targets from our T3 Platform. The same logic applies to the metabolic infrastructure, where we need to identify the combinations of genes in specific metabolic pathways to optimize the targeted outcome. In the meantime, Yield10 is working to develop, translate and demonstrate the commercial value of new – both regulated and genome-edited trait genes already identified in our discovery platform in major crops, and continues to identify additional genome editing targets for improved crop performance in several key food and feed crops, including canola, soybean, rice and corn. Let's now turn to Slide 8, our pipeline of traits. Here we have a summary of our traits in development. We have seed yield traits such as C3003 that will be regulated, and our current focus is to deploy them in larger acreage crops that are already GMO. In 2017, for the C3003 trait, we focused on developing fund-approved points, higher seed crops, and deepening our understanding of how it works. Later this quarter, once we have completed our analysis, we'll be reporting those results. In addition to the progress we are making with C3003, we have a pipeline of additional traits and are currently focusing on ways or knowledge we may be able to develop using genome editing. These fit into two categories: our oil enhancing traits include C3004, 7, 8A, 8B and 9; we then have the C4000 series of transcription factor genes, and a number of these are very exciting in own right, but in addition, they've been instrumental in enabling us to identify combinations of transcription factors for editing to improve crop performance. A key objective of this platform is to generate revenue by providing R&D services for the ag sector. Across all these areas, we see many opportunities for licensing or partnerships as we demonstrate the value proposition of our traits and technology platforms. Let's now turn to Slide 9, genome editing in agriculture. Genome editing in effect completes the toolbox for enhancing crop yield and value by enabling precision molecular breeding of gene combinations. Because genome editing does not introduce foreign DNA into plants, the USDA may treat them as nonregulated, significantly reducing product development timelines and cost. For example, for a typical regulated GMO trait, it can take an average of 13 years and an average cost of $130 million for full global deregulation. There are examples of regulated specialty crops for the timeline, maybe closer to five or seven years, and they cost in the $30 million to $60 million range. Although there is less data available here, the Arctic Apple is reported to have cost between $5 million and $10 million. But genome editing may allow the commercialization of a new trait in less than half the time and a fraction of the cost. This potentially opens up the market through development of new traits by farmers in the small ag innovators like Yield10. Yield10 is fortunate to have in hand a series of novel genome editing targets as well as a powerful gene editing discovering capability. The recent announcement by DuPont Pioneer and the Broad Institute that they plan to make nonexclusive licenses readily available in the ag space is encouraging, but we'll have to wait and see how that unfolds. Please turn to Slide 10, traits for increasing seed oil content. In this quarter, Yield10 received confirmation of nonregulated status for our C3008a genome-edited trait in Camelina, an important milestone for our team as it establishes this capability in the organization. C3008a is one of a number of genome-editing targets, which include C3004, 7, 8b, 9 and 10. The objective here is to have a decent combinations to optimize seed oil content and yield. I mentioned earlier in the call that we are currently working on a multi-gene-edited oilseed line based on trait C3008a, b and C3009 as an upcoming submission. Also, earlier this year, we announced we'd taken an exclusive global option from University of Missouri to a trait we've named C3007. C3007 controls a unique regulatory mechanism, controlling a key point in the metabolic pathway for fatty acids and oil biosynthesis. C3007 is also potentially accessible through genome editing, and we believe C3007 could be combined with other genome-edited traits to reengineer oil biosynthesis. So let's now turn to Slide 11, and I'll update you on the progress of C4000 traits. Last quarter, we reported results from our studies of C4001 in switchgrass, where we achieved a 75% increase in photosynthesis based on measuring the electron transport rate. We also reported an almost doubling of the yield of biomass. C4001 is clearly very interesting for increasing biomass yield, but we're also interested in how it and the other global transcription factors, C4002 and 3, impact seed yield. For this reason, a study of these genes is being progressed in rice internally, and in wheat through a collaboration with the NRC in Canada. We also plan to test them in corn. Here, our key objective is to determinate the impact of these genes on CGL. In addition to these traits, we recently filed a new patent application on 24 additional transcription factors and their combinations for genome editing to improve crop performance. Editing of the first of these, C4004, is now ongoing in rice. So let's now turn to slide 12, market opportunities. The portfolio of high-performance traits in development by Yield10 are expected to have application in both commodity and specialty crops, where the value chain structure and potential partners are quite different. In the commodity crop space, the value proposition for yield traits may include reducing grower costs, increasing production, lowering food costs and increasing food security and sustainability. In the specialty space, the value proposition of Yield10 traits may include benefits to consumers such as oil composition, which increases health and wellness attributes; sustainability; and benefits to growers and producers, such as alternative crops and feed to our industrial food stocks. Let's now turn to Slide 13, value creation. For large acreage commodity crops like canola, soybean and corn, we recognized early on that we needed to position ourself as the trait provider to the ag majors. The ag value chain is well established and highly consolidated and focused on delivering value to the farmer. Everyone has to be rewarded, so there's a basic value-sharing structure in place, so about half or more of the value goes to the farmer and the remainder is shared between the seed company and the trait provider. The share available to the trait provider depends on how far the trait has been progressed with the key flip points and, in particular, multisite field trials in key crops. The more progress made, the less risk and higher the share of the value the trait provider can capture. By targeting step change increases in seed yield in the major crops, the example shown on table is a 20% increase for canola and soybean, we have the potential to create around $10 billion in added value. This provides more than enough added value to enable Yield10 to capture a significant revenue stream from its yield traits like C3003 in just these two crops. The potential shorter timelines and lower regulatory hurdles for the development of genome-edited traits opens up a wider range of food and feed crops for development. Here we see potential for significant revenues by healthy crops. We have a focused editing activity on increasing oil content of oilseeds, where we believe this will provide a competitive advantage for products and markets driven by the high oil component of the seed. Here we are targeting a 20% or higher increase in oil content while being mindful not to compromise the feed value of the remaining meal. In this area, we are still building out our business model, and as we'll tell you more about [indiscernible] we'll have a better sense of the potential and the best approach to monetize it. Let's turn to Slide 14. We believe that our traits in development provide us with multiple paths to revenue, driven by our yield traits and unique capabilities. Major North American commodity crops, we believe, can accelerate the development through working as soon as – we can – believe we can accelerate development through working as soon as possible with the ag majors. Our approach is to provide a low hurdle for them to begin deploying and testing our traits in their elite germplasm using their resources. Here we anticipate license agreements with milestone payments to Yield10 and participation in downstream economics. The next path is specialty in niche crops, including specialty oils. There's a lot of innovation going on in this area, with ag majors and with companies deploying genome-edited traits to improve oil composition. We see opportunities to combine traits to improve yield and composition. We envisage a nonregulated path to market and JV-type agreements for a significant share of downstream economics. Here the potential number and types of partners is much larger than the ag seed space. The third path to revenue involves our technology platforms where we can accelerate innovation based on combining our unique metabolic engineering innovation and the integration of our two platforms to predict gene combinations for crop improvements. To date, we have accessed government grants and relationships with leading plant scientists, and we plan to expand this by leaning on R&D support for partner-funded programs. Let's now turn to Slide 15, upcoming milestones. Yield10 has a strong pipeline of exciting crop trait technologies. Yield10 is making strong progress deploying our novel yield traits into key food crops which we believe will help us build significant value in the business. We will be reporting the results of our field tests and other studies with C3003 later in this quarter, once data is finalized. In addition, we are now planning for additional field tests in 2018 in C3003 in Camelina and canola sites in Canada, and expect to continue to progress our work in soybean and to report our greenhouse data on C3003 in rice in 2018. We've got a lot of progress on the genome editing front in 2017, and we'll continue to progress oil-enhancing traits using CRISPR genome editing. We also progressed our C4000 series traits into rice and corn in the months ahead. We believe that data we are generating across the traits and platforms as well as our next generation trait gene discovery platform will position us well to secure ag industry collaborations. We will continue the work we have been doing with our academic partners on underlying science and suspect much of the work will be published in academic journals and presented at scientific conferences. So far this year, we have filed five new patent applications. Overall, you can see that we are expecting to be very productive through the end of 2017 and beyond. Let's now turn to Slide 16. Yield10 is developing generic trait technologies for the food and feed crops to produce higher yields with lower inputs of land, water and fertilizer. We have made good progress meeting our milestones of 2017 and building on those accomplishments. We are well positioned for 2018, recognizing that we'll need to continue to seek financing for the continuation of our business past the first quarter of 2018. Both of our discovery platforms have led to the identification of promising genome-editing targets, and we will be working to further develop these targets to include CGL oil content and our biomass according to the trait of crop. Taking this all together, we have a clear vision for our business, defining the commercial opportunities in three areas: commodity crops, specialty oils and our R&D platform. We'll continue making steady progress towards our goal to create value for our shareholders. So with that, I'd like to turn the call over to Lynne for questions. A - Lynne Brum: Thanks, Oli. So let's open the call to analyst Jay Albany of SeeThruEquity.

Thanks for taking my questions and congratulations on the results. Congratulations on this DOE grant. Could you further describe, I guess, the timing and pace of the monies you'll receive? And maybe how this could accelerate the progress on your T3 platform?

Yes. Thanks, Jay. We'll have Kristi take that question.

Dave, in September, we were informed that Yield10 would be a sub-awardee on a new grant that is led by Michigan State University, and our share of the grant is almost $3 million over the 5-year period of the grant. Since different years have different tax associated with them, yearly expenditures will be quite different each year and will fall somewhere between $485,000 and $700,000 per year. As far as accelerating progress on the T3 platform, it's important to understand that – what we have previously done with the T3 Platform. We have previously used it to search for global regulatory genes or master gene switches that control the expression of multiple genes to increase photosynthesis and biomass yield. In the new DOE program, we'll be taking a slightly different approach and will be looking for master gene switches that impact important value drivers of oilseeds, which are the total oil content of the seed and the total seed oil per acre. And in this work, we expect to identify genes that serve as control points for increasing oil and seed yield. So this new approach in the grant targeted to oilseeds will help run the overall utility of the T3 Platform. It's also important to note that, while this work will be done in the oilseed, Camelina, we expect the results to be transferable to other larger acreage oilseed crops such as canola and soybean.

I had a follow-up, if that's okay. The USD confirmed on – USDA confirmed nonregulated status. Do you think you could remind us of the scale of the opportunity there? My understanding is that the decision might be able to – the process might be able to be replicated with other crops, and maybe that would help in any partnership conversations in the future?

Okay. Yes, so taking our plan forward with nonregulated status from APHIS – USDA-APHIS means that conducting field tests is very straightforward, and it's not subject to the regulation and the permitting needed for GMO traits. And sources in the industry have estimated that it may take just three to five years to introduce the nonregulated trait produced through genome editing. It's important to note that, even with the nonregulated status from USDA-APHIS, food crops may still be subject to regulation by FDA. So having created the genome-edited Camelina line, and having prepared a package for review that was accepted by USDA-APHIS, this provides us with confidence that we understand what is required to get confirmation of nonregulated status from USDA-APHIS through their MI-regulated process.

So Oli, back to you for another question. We had a question submitted by a shareholder, and they asked, what do you see ahead in terms of activity around business development going forward?

You know, Lynne, so the Yield10 team has been very productive in 2017. But given the way our business strategy is shaping up, it's pretty clear we will need to increase our business development activities, which is where I already spend a considerable amount of my time. Our goal is to form R&D partnerships and license agreements both to expedite the development of our technologies and as a source of revenue.

Great. Thanks, Oli. And now I'll turn the call back to you for concluding remarks.

Well, thanks to everyone for joining us on the call tonight. Thank you to the entire Yield10 team that has worked so hard to execute the transitions to the crop business focus on today. Well, it's going to meet our key milestones in 2017. And thanks as well to our shareholders. We look forward to talking with you again in our next call.

Good night, everyone. You may now disconnect.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.